WTI prompt-month futures were up $0.10 at $58.35/Bbl early Wednesday (7:45 AM CT)
The EIA now expects US crude production to reach a record 13.6 MMBbl/d this year, reinforcing the broader supply glut in the global market
A composite of major bank forecasts suggests Brent, currently near $62/Bbl, will drift lower through 2026
Goldman Sachs is the most bearish with a $56/Bbl annual average forecast, while Citigroup sits at the top end at $62
JP Morgan expects the imbalance to be smaller than headline figures suggest, anticipating OPEC+ will reverse course and cut output mid-year
Bank of America, by contrast, assumes OPEC+ will resume adding barrels after the scheduled 1Q26 pause
API reported a 4.8 MMBbl draw in U.S. crude stocks ahead of Wednesday’s official EIA data
The IEA and OPEC monthly reports are also expected later this week
Indian refiners continue buying discounted Russian crude (Bloomberg)
Four of India’s seven major refiners, including Indian Oil and Bharat Petroleum, are taking Russian barrels due to steep discounts
Reliance Industries is avoiding Russian crude, even under existing term deals, to minimize sanctions exposure
India’s intake of Russian crude is expected to decline but remain ongoing at reduced volumes, with barrels pricing around $40–$45/Bbl
Natural gas trades higher after sharp selloff
Yesterday, The January Henry Hub contract declined by 34c, but prices have recovered this morning
Weather forecasts shifted warmer overnight, with Lower-48 temperatures forecast to rise above the ten-year average following the current cold pattern
According to data from S&P, dry gas production continues to average about 108 Bcf/d, compared to highs of more than 109 Bcf/d over the weekend
EIA raises Henry Hub forecast (EIA)
In the latest Short-Term Energy Outlook, The EIA increased its Henry Hub price forecast for this winter by more than 40c due to a colder than average December
The agency increased its forecast for dry gas production, with output expected to average 109 Bcf/d in 2026
Electricity load growth is forecast to be 2.4% in 2025 and 1.7% in 2026, compared to relatively flat growth from 2010-2020
This forecast was reduced compared to November due to how much large load power demand came online in 2025 and the implications for near-term growth
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